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Invoice Finance for Professional Services

When working for business clients, receiving payment upon completion of the job is often something of a pipe dream.

Payment terms of 30, 60 or even 120 days are now expected, and this can place significant strain on your cash flow, not to mention have an adverse effect on your relationships with clients.

Invoice financing solutions can help to lessen the load, particularly if you are running a new or small business. However, it’s important to consider whether this is truly the right financing option.

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Financial challenges for business and professional services

Managing cash flow

With many customers paying for services via invoices or ‘on completion of work’, payment can often take a while to come in, which means a lot of chasing up invoices and struggling to make ends meet in the meantime. Waiting a matter of months for payment and having cash flow interrupted can be detrimental to the day to day running of a business, and also a deterrent to taking on large contracts for fear of yet more late payments.

Bootstrapping for quick results

For small firms or consultants, the notion of self-funding a lot of the business is very tempting, as it’s easier to get things paid for and done. But it is also one of the easiest ways to back a business into a corner when it comes to financing. Getting out of this cycle of expensing from your own funds can be tough, especially when the costs you need to pay just keep on coming.

Offshoring

Thanks to advancements in technology, businesses don’t always have to be in the same country to work together. It’s important, therefore, that businesses can develop good off-, near-, and on-shore capabilities to take advantage of the opportunities this presents for expansion.

Hiring skilled workers

With any business, you need to be sure that you’re hiring the right people for the jobs that need doing. This involves making sure that the pay is proportionate to the skill level, but also can mean that those with the required skills can push those wage brackets up due to the demand and increase the cost of hiring.

 

What invoice financing options are available to businesses?

One of the most commonly used forms of financing for businesses with cash flows consistently interrupted by late payment is invoice finance. Companies can use invoice factoring to receive up to 100% of the cash owed and have its customer pay the lender when the invoice date comes due. Alternatively, they can use invoice discounting to keep the facility confidential and have the owed amount paid into a trust account in the company’s name.

There is also the option of spot factoring if a professional services business only has one or two singular invoices they would like to receive payment for.

As the UK’s largest invoice finance broker, Touch can go through all these options with you and help figure out which invoice financing agreement will best suit your business needs.

 

Get in touch

Knowing which lenders are best suited to your business needs could require a lot of research, but Touch is an expert at finding the right financial solution for companies after a brief consultation to understand your needs.

We understand that the wrong funders can have an impact on the cash available for your business. As we are specialised brokers, we can make sure you to speak to lenders who understand your business and professional services finance needs, and will get you the finance you deserve.

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